2G: Government will not approach SC seeking extension of four-month deadline

NEW DELHI: All mobile phone companies whose licences were cancelled by the Supreme Court may have to suspend operations from June 2 as the government will not approach the Supreme Court seeking an extension of the four-month deadline.

The apex court in its February 2 order that quashed 122 mobile permits allotted in 2008, had directed the government to issue fresh licences through auctions within four months. But, the government in its clarification petition has said that that it would require a minimum of 400 days to carry out the auctions implying that the process would be complete only by March 2013.

Telecoms secretary R Chandrasekhar confirmed that operations of quashed licences would have to stop on June 2 unless the court was to grant an extension. But the catch is that the Supreme Court last week declined its reconsider its order cancelling 122 telecom permits issued by former telecoms minister A Raja.

In all seven companies had filed review petitions before the court - Videocon, Etisalat-DB and Uninor, majority owned by Telenor - that have lost all their licenses as well as those such as Tata Teleservices and Idea that lost a few of their permits. While the apex court agreed to hold further hearings on the review plea filed by the Centre, this petition does not seek an extension to the four-month during which the quashed mobile permits are valid.

Ditto with the telecom department's (DoT) clarification petition. An extension of the four-month deadline is also not part of the presidential reference that the Centre will make to the apex court.

"The telecom department's (DoT) review petition largely seeks that portions of the SC ruling which appear to foray into the domain of the executive be set aside. In the clarification petition, we have pointed out there is a gap between the four months deadline set by the SC and the 400 days we require for carrying out the auctions. Unless the apex court responds to this, or accepts curative petition of companies, operations will have to stop on June 2. The DoT is not seeking an extension," a telecoms department official explained to ET.

This official further said that in the absence of any court directives, operators would have to suspend services till they bag new permits and airwaves in the upcoming auctions. Such a move will impact over 40 million customers of Uninor, 16 million of Sistema, 6 million of Idea Cellular and 5.5 million users of Videocon amongst others.

"Some operators have filed clarification petitions. Unitech Wireless and Sistema have already announced they will file curative petitions and other companies are set to follow suit. We remain hopeful that the SC will grant an extension to its four-month deadline through these petitions before June 2," said a top executive with one of the companies whose permits were cancelled.

What is worrying mobile phone firms is that the apex court has rarely entertained curative petitions after review pleas has been dismissed. The chief executive of a telco, which was amongst the worst affected from the SC's February 2 order, said it was the government's duty to solve this issue. "The SC directed the government to give out new licences within four months. Its ruling also states that operators were not to blame for licence cancellation and permits were quashed as the government followed an 'arbitrary and discriminatory policy'. If the Centre cannot meet the SC deadline, the onus is on the government to find an alternative solution that will address the industry's concerns, and allow us to continue operations till fresh licences are issued," this executive added.

STel, Etisalat told to restore services till licence expires

Telecoms regulator Trai on Wednesday directed mobile phone companies S Tel and Etisalat to continue operations until the validity of their licences. Both telcos had asked their customers to shift to other service providers using mobile number portability and had announced they were shutting down services after apex court had quashed their licences. The Trai directive implies they will have to provide services till June 2.

"Restore all network connectivity, ensure continuity of service to its subscribers and maintain the quality of service till its licence is operational," Trai said in separate directives and asked both companies to file compliance reports within three days. The regulator's directive comes as existing rules mandate mobile phone companies to ensure continuity of services to its customers till their licence is terminated or suspended by the licensor.

Etisalat had about 1.7 million customers, while S Tel, with operations in just six of the 22 regions had 3.5 million users as of February-end, when they announced that were winding up their operations here. But even prior to that, Etisalat DB's services had collapsed in most parts of the country after it failed to clear its dues to (RCOM), with which it had an infrastructure sharing arrangement. In February, Etisalat had also said it was taking $829-million hit on its Indian earning after the SC orders resulted in the Gulf carrier's JV here losing all its 15 permits. Etisalat owns 45% stake in Swan Telecom, which has been renamed as Etisalat DB.

The cancellation of licences also resulted in Bahrain Telecommunications exiting India by selling its 43% stake in mobile phone company S Tel back to its Indian affiliate.